1 The proposed Condition 24 is invalid and is deleted from the proposed permit conditions.

2 The proposed Condition 25 is valid and can remain part of the proposed permit conditions.

3 Member Hewett will shortly issue his overall orders to finalise this appeal.

4 This appeal involves an application to review the failure of the Responsible Authority to grant a permit within the prescribed time. The proposal in question is a 34 lot subdivision of the land at 384 Gordons Road, South Morang ("subject land"). The Council's basic position in relation to the proposal was that had there been sufficient time for Council to formally make a decision on the proposal, it would have been refused, essentially due to a lack of policy support and an inconsistency with the relevant Development Outline Plan.

5 The merits of the proposal were dealt with by Member Hewett at the hearing of this matter held on 20 December 2004, with his decision issuing on 1 February 2005. At paragraph 42 of this decision, Member Hewett confirms his satisfaction that "...a permit is capable of being issued for the proposed subdivision having regard to the requirements of the Development Plan Overlay". However following doubt that had arisen during the hearing regarding the validity of the proposed conditions 24 and 25, Member Hewett's Order 1 facilitated a further hearing on 4 March 2005 for the parties to make submissions to me regarding the legality or otherwise of Conditions 24 and 25.

6 This further hearing was held on a Friday afternoon, and Mr Montebello and Mr Naughton stoically put forward their submissions regarding the contentious conditions 24 and 25 (with Mr Montebello seeking to justify the validity of these conditions and vice-versa for Mr Naughton). Although as a courtesy to the parties Mr Hewett was present during the hearing, as a legal member, this decision on the legality of conditions 24 and 25 is made by me alone.

7 As I requested during the Friday hearing, I was provided after the hearing with a copy of the Interim and Final Panel Reports Amendment L82 - South Morang Local Structure Plan under cover of the Maddocks letter of 9 March 2005, together with a copy of the Panel Report for the New Format Whittlesea Planning Scheme under cover of the letter from The Partners dated 21 March 2005.

8 Condition 24 of the Council's without prejudice conditions states:

Prior to the Issue of the Statement of Compliance, the applicant/owner must provide to an amount of $25,430.00 for a contribution to the cost of construction of Gordons Road to the Responsible Authority. This amount of contribution is based on the area of the land being subdivided on a per hectare basis. All costs associated with the preparation and execution of the Agreement must be borne by the permit/holder/owner.

Development contributions of 42,566.00 /hectare shall be paid to the Responsible Authority in accordance with the approved South Morang Local Structure Plan prior to the issue of the Statement of Compliance.

10 I refer to the following useful summary of the planning controls from paragraphs 5 to 7 of the Council written submission.

The land is zoned Residential 1 and is covered by a Development Plan Overlay (Schedule 6) and a Vegetation Protection Overlay (Schedule 1).

In addition to the planning controls, the land is affected by an incorporated document being the South Morang Local Structure Plan.

The DCP [ie the Local Structure Plan] specifies a development levy of $42,566 per hectare for the land.

11 Although the land falls within an area affected by a Development Plan Overlay No. 6 control, it is common ground that there is no specific "Development Contributions Plan" specifically prepared in relation to the subject land since that Overlay No. 6 was introduced. Following Council's submission, this is because the South Morang Local Structure Plan satisfies this practical requirement (a position contested by Mr Naughton).

12 I understand from the (difficult to read) approval stamp on my copy of The South Morang Local Structure Plan ("Structure Plan") that it was approved on 3 February 1997. The Structure Plan is expressly made an incorporated document under Clause 81 of the Planning Scheme. The Structure Plan (with the Tribunal's emphasis added) consists of:

•

An opening statement of the "goals", "main features and principles" and "land budget"; then

•

Has various sections dealing with specific planning issues ie "transport", "open space", "housing and population", "activity centres", "urban design", employment", "staging", "infrastructure levy", and then finally "monitoring and review";

•

Three appendices, the first two dealing with activity centres and heritage issues, and the third being the "South Morang Local Structure Plan Infrastructure Funding Policy" dated December 1995.

13 For the purposes of this decision, I shall refer to this simply as the "Funding Policy".

14 The following statement is found in between the cover page and the Table of Contents in the Funding Policy.

This report has been prepared by the City of Whittlesea following consideration of the Panel Report on Amendment L82 to the Whittlesea Planning Scheme.

It is based on a report prepared by Spiller Gibbins Swan Pty Ltd entitled "South Morang Local Structure Plan, Infrastructure Funding Policy", January 1995, a report by USE Consultants Pty Ltd entitled "South Morang Local Structure Plan, Development Contribution Arrangement with National Mutual/Silverton" and incorporates the changes recommended by the Panel.

15 The Funding Policy is just over 30 pages long (including the Appendices) and, after an "Introduction", deals with "Elements of a fiscal plan", "The case for development contributions", "Planning units", then a three page analysis of development and infrastructures issues arising for "The Eastern Precinct", then the same in relation to a 4 page analysis of "The Western Precinct", with the final sections being "Summary of results", "Assessment", "Implementation", "Principles of Implementation", "Recommendations", "Summary" and three Appendices dealing with "Costings information", "Methodology" and "Development contributions scheme reserve funds".

16 Reviewing the Interim Panel Report dated 14 May 1994 in relation to the Structure Plan, it raises substantial concerns about the "development contributions" aspects of the draft Amendment L82. The Executive Summary of this Interim Panel Report includes the following paragraphs.

It became apparent that the proposed Ordinance provisions and the Local Structure Plan documents require redrafting, and that a development contribution levy policy must be formulated by the Planning Authority. The proposed open space contribution is excessive, and the distribution of such space requires refinement. The three stages proposed in development approvals are unnecessary and have the potential to create delays and obstacles in the development process. The three stages should be reduced to two.

The proposed development levy is excessive and requires to be reduced to avoid development within the Local Structure Plan area being economically unviable.

17 Section 13 of the Interim Panel report (pages 12 to 17) specifically discusses "Development Levies". It refers inter alia to the general principles for applying development levies set out in the landmark case of Eddie Barron Constructions Pty Ltd v Shire of Pakenham & Anor (1990) 6 AATR 10, to the Guidelines for Development Contributions 1991, and the then draft Review of Development Contributions Final Report 1994 (which was treated by the Panel as a "seriously considered proposal"). Various shortcomings in this aspect of the draft Amendment L82 are discussed, including the need to address discrete issues arising from the eastern versus the western development areas in question.

18 In relation to the Final Panel Report dated 7 July 1995, the Introduction to that report notes that:

Following the interim panel report, the Planning Authority with its consultants re-drafted the Amendment and the LSP, proposed the South Morang Local Structure Plan Infrastructure Funding Policy 1995 prepared by Spiller Gibbins Swan Pty Ltd, (the infrastructure funding policy) and continued the consultative process with stakeholders in an attempt to narrow the issues, and to arrive at a solution acceptable to all parties.

19 At pages 5 and then 15 of the Final Panel Report under the heading "South Morang Local Infrastructure Plan Infrastructure Funding Policy - January 1995", the Panel states as follows.

The novel Panel procedure adopted in respect of this amendment has resulted in most areas of contention having been resolved by direct negotiation and the evolution of a Local Structure Plan which is much improved from the one originally exhibited.

The amount of the development contribution levies in both precincts have been substantially reduced, and a two level rather than a three level approval process has been included. The road network has been finetuned. Public open space requirements have been reduced from 11.5% as originally proposed, to 8% which is consistent with open space requirements in comparable areas. The process has produced an effective Local Structure Plan and Infrastructure Funding Policy for the South Morang area. [Tribunal emphasis]

Many of the criticisms of the development levy proposed were accepted by the Planning Authority and Spiller Gibbins Swan Pty Ltd was retained to prepare a detailed infrastructure funding policy which is now to be an incorporated document referred to in the LSP. The infrastructure funding policy is in line with the State Government's "Guidelines for Development Contributions - October 1991", and the principles enumerated in Eddie Barron Constructions Pty Ltd v Shire of Pakenham and Anor (1990 - 6AATR10). Subject to consequential amendments made necessary by the recommendations made by the Panel, the infrastructure funding policy is now in a form which is acceptable to all parties.

20 Turning to the May 1998 Panel Report for the new format Whittlesea Planning Scheme, it only touches on development contribution issues briefly, dealing more with the usual "big picture issues" associated with the introduction of the new format schemes. At page 40 the Panel Report does include the following commentary on point.

This is a necessary local policy in a designated growth area and must be read in the context of Council's application of the Development Contributions Plan Overlay. Implementation of this local policy is also bound by the provisions of Part 3B of the Planning and Environment Act 1987 which specifically deals with development contributions. Council should ensure that its local policy is not in conflict with the provisions of the Act.

21 In addition, in Section 3.6 of the Panel Report, it is recorded that the incorporated documents in the new format Planning scheme include four Local Structure Plans (which include the South Morang Local Structure Plan), with it being stated that the Panel is satisfied that all of these Structure Plans meet the requirements for incorporation as set out in the Manual to the VPPs.

22 It seems helpful to set out the key statutory provisions in question here, bearing in mind the recent modifications arising from the Planning and Environment (Development Contributions) Act 2004 which was gazetted on 16 December 2004.

23 I start with Sections 62(5) and (6), which provide (as modified) as follows.

(5)

In deciding to grant a permit, the responsible authority may-

(a)

include a condition required to implement an approved development plan; or

(b)

include a condition requiring specified works, services or facilities to be provided or paid for in accordance with an agreement under Section 173; or

(c)

include a condition that specified works, services or facilities that the responsible authority considers necessary to be provided on or to the land or other land as a result of the grant of the permit be-

(i)

provided by the applicant; or

(ii)

paid for wholly by the applicant; or

(iii)

provided for or paid for by the applicant where the remaining cost is to be met by any Minister, public authority or municipal council providing the works, services or facilities.

(6) The responsible authority must not include in a permit a condition requiring a person to pay an amount to for or provide works, services or facilities except-

(a) in accordance with sub-section (5) or section 46N; or

(b) a condition that a planning scheme requires to be included as referred to in sub-section 1(a); or

(c) a condition that a referral authority requires to be included as referred to in sub-section (1)(a).

24 Also relevant is Section 46N, which provides as follows (with the Tribunal's emphasis).

46N Collection of development infrastructure levy

(a)

an approved development contributions plan provides that a development infrastructure levy is payable in respect of the development of any land; and

(b)

an application is made under this Act for a permit to carry out that development on that land-

the responsible authority must include a condition in the permit that the applicant -

(c)

pay the amount of the levy to the relevant municipal council within a specified time or within a time specified by the municipal council; or

(d)

enter into an agreement with the relevant municipal council to pay the amount of the levy within a time specified in the agreement.

(a)

an approved development contributions plan provides that a development infrastructure levy is payable in respect of the development of any land; and

(b)

a permit is not required under this Act for the development

a person who proposes to carry out that development of the and must -

(c)

pay the amount of the levy to the relevant municipal council within a time and in a manner specified by the municipal council in accordance with the approved development contributions plan; or

(d)

enter in an agreement with the relevant municipal council to pay the amount of the levy within a time specified in the agreement.

25 Section 46H of the Act provides inter alia that "approved development contributions plan means a development contributions plan which forms part of an approved planning scheme". In terms of the extent to which definition advances our understanding here, it seems fair to say that this definition is not the finest hour of parliamentary drafting!

26 Section 46K of the Act provides as follows.

(1)

A development contributions plan must-

(a)

specify the area to which it applies; and

(b)

set out the works, services and facilities to be funded through the plan, including the staging of the provision of those works, services and facilities; and

(c)

relate the need for the works, services and facilities to the proposed development of land in the area; and

(d)

specify the estimated costs of each of the works, services and facilities; and

(e)

specify the proportion of the total estimated cost of the works services and facilities which is to be funded by a development infrastructure levy or community infrastructure levy or both; and

(f)

specify the land in the area and the types of development in respect of which a levy is payable and the method of determining the amount of levy payable in respect of any development of land; and

(g)

provide for the procedures for the collection of a development infrastructure levy in respect of which any development for which a permit under this Act is not required.

(2)

A development contributions plan may-

(a)

exempt certain land or certain types of development from payment of a development contribution levy or community infrastructure levy or both; and

(b)

provide for different rates or amounts of levy to be payable in respect of different types of development of land or different parts of the area.

27 To recap, the contentious permit condition 25 provides as follows.

Development contributions of 42,566.00 /hectare shall be paid to the Responsible Authority in accordance with the approved South Morang Local Structure Plan prior to the issue of the Statement of Compliance.

28 Mr Montebello's submissions in relation to Condition 25 flow from the relevant text from Section 46N of the Act. In summary, Mr Montebello relied on Section 46N:

•

anticipating a situation where an approved development contributions plan requires a development infrastructure levy to be paid in relation to certain development, and a permit is sought for the development; and

•

then creating a mandatory situation where in the above circumstances the responsible authority must include a condition in any permit granted that requires the relevant levy to be paid by the developer.

29 Building on this, Mr Montebello put to us that the South Morang Local Structure Plan ("Structure Plan") does constitute an "approved development plan", having regard to the definition of that term, and to what he argued is the comprehensive nature of this Structure Plan.

30 Putting the above points together, the thrust of Mr Montebello's case here was that the Council in this case had no choice but to impose Condition 25, since Section 46N creates a legal requirement for this to occur.

31 In response, Mr Naughton did not query Mr Montebello's basic line of thinking, but Mr Naughton instead concentrated on the underlying question of whether the Structure Plan constitutes an "approved development contributions plan". While Mr Naughton put to us that this particular Structure Plan fails that test, he conceded that Condition 25 is a valid condition if in the final result I am satisfied that the Structure Plan here constitutes an "approved development contributions plan".

32 The "sixty nine dollar question" then becomes whether the available evidence supports or does not support a finding that the Structure Plan here constitutes an approved development contributions plan ("approved DCP").

33 Mr Montebello put forward the following points in support of his position in the affirmative:

•

he reviewed the various criteria under Section 46K(1), in terms of the various aspects which sub-sections (a) to (g) (which I have set out above) require to be addressed with respect to what the minimum content of an approved DCP should be. In carrying out this exercise, in relation to each of the criteria under sub-sections 46K(1)(a)to(g), I was in each case referred us to the corresponding features of the Structure Plan (including where necessary referring to the annexed 1995 Funding Policy);

•

in relation to the fairly brief definition of "approved development contributions plan" in the Planning Scheme, Mr Montebello noted that (as required by the definition) the Structure Plan is "part of" the Whittlesea Planning Scheme, in clearly being a formally incorporated document under Clause 81 of the Planning Scheme;

•

he relied on the fact that the Structure Plan had gone through what Mr Montebello regarded as a rigorous review and scrutiny process under the Interim and Final Panel Reports for Amendment L82, and been "given a tick" under the latter of these two Reports, together with the Structure Plan being considered as part of the new format planning scheme Panel Report;

•

Mr Montebello highlighted the lack of any past challenge to the legitimacy of the Structure Plan in terms of how it deals with development contributions, and Mr Montebello put to us that "...every landowner within the area of the plan has paid a contribution in accordance with the plan". He further stated that "Proper accounts are set up under the plan and infrastructure as required by the plan is being provided by the municipal council";

•

Mr Montebello relied on the fact that no where in the Act is there any mention of a requirement that an "approved DCP" must have been created under the framework of a Development Contributions Overlay;

•

he similarly sought to "hose down" any suggestion that the absence of the words "Development Plan" in the title of the Structure Plan here has any significance. In other words, Mr Montebello argued that the key issue here is the adequacy of the contents of the relevant document, not how it has been "labelled". To reinforce this point, he relied on the fact that since the new format Planning Scheme was introduced, two of the three further DCPs have been incorporated (albeit using the framework of a Development Plan Overlay) are referred to as "Structure Plans" rather than as "DCPs".

•

challenged whether the contents of the Structure Plan satisfies the detailed requirements of Section 46K(1)(a) to (g) of the Act (although it is significant that, unlike Mr Montebello, Mr Naughton did not attempt to actually review the contents of the Structure Plan against the (a) to (g) criteria);

•

argued that to be an "approved DCP", the Structure Plan here either should have been labelled as a DCP in its title, and/or should have been created by Council under the framework of a Development Contributions Overlay;

•

put to me that had the Structure Plan more taken the form of a purpose-drafted and more specific DCP document, rather than being a Structure Plan that deals with other matters as well as development contributions, then a superior and more appropriate level of scrutiny of the Structure Plan would have occurred at the Panel hearing stage.

35 Having considered the submissions of both parties, the contents of the Structure Plan and Panel Reports and the relevant statutory provisions, I find that the Structure Plan:

•

meets the requirements of Section 46K(1);

•

is part of the Planning Scheme in being an Incorporated Document;

•

has had the benefit of an appropriate public review process;

•

can still constitute an approved DCP regardless of being labelled as a "Structure Plan" rather than as a "DCP";

•

has on the evidence been accepted by other neighbouring owners in the locality as an approved DCP.

36 Given the findings I have set out above, my overall conclusion is that the Structure Plan constitutes an approved DCP for our purposes here, and hence I am satisfied that there was a mandatory requirement under Section 46N for Council to include the $42,566/hectare development contribution here.

37 Accordingly, my legal ruling is that Condition 25 is a valid condition and that the Applicant's challenge to same fails.

38 I rely here in particular on:

•

the relatively comprehensive treatment of development contribution issues in the Structure Plan, including the separate 30 page plus 1995 Funding Policy which is annexed to the Structure Plan;

•

the detailed analysis of the relevant development contribution issues by the Panel in both the Interim and the Final Panel Reports for Amendment L82, which I have endeavoured to highlight through my quoting of relevant passages from these panel reports which I have set out above. I refer in particular here to the Panel's approval of the (much improved) treatment of the development contribution issues in the revised form of Amendment that was considered by the Panel in its Final Report. It is also significant that the Panel in its Final Report notes that the re-drafting process was driven by Council's consultation with the key stakeholders. In summary, I do not see any real evidence to support Mr Naughton's proposition that the Structure Plan here did not go through adequate scrutiny at the panel hearing stage;

•

the fact that the opening pages of the Funding Policy annexed to the Structure Plan confirm that the Funding Policy is based on a report by a highly reputable consultant (Spiller Gibbins Swan) and incorporates the changes recommended by the Amendment L82 Panel;

•

the apparent pattern of other owners in the area accepting the Structure Plan as an approved DCP, together with the Council having set up the relevant accounts to collect the relevant monies, to then be able to use that monies to provide infrastructure as required by the Structure Plan (I am reminded of the phrase "if it waddles like a duck, quacks like a duck, then it is probably a duck!");

•

I agree with Mr Montebello that in light of the rather basic definition of "approved DCP", it seems of no great consequence that the Structure Plan here is neither labelled as a "DCP" nor created under the framework of a Development Plan Overlay.

39 I note that Mr Naughton sought to leverage off the decision of Member Bruce in Spano v Greater Geelong CC [2000] VCAT 512. In relation to that part of the decision at paragraph 36 where Member Bruce refers to the need for a quite strict approach in confining contributions which may be imposed under Section 62(5)(a) to "approved" development contributions plans, Mr Naughton argued that this reinforced the need for a strict approach in considering whether or not the Structure Plan here constitutes an approved DCP. My response is that:

•

firstly, on one reading of paragraph 36, Member Bruce's cautionary comments more relate to the operation of Section 62(5) of the Act, rather than applying the definition of "approved DCP"; and

•

secondly, I have sought to take a careful and thorough approach to considering whether the Structure Plan here constitutes an "approved DCP", as I accept this is not a finding which one can come to lightly. However, for the reasons set out above, I am satisfied this question should be answered in the affirmative.

Prior to the Issue of the Statement of Compliance, the applicant/owner must provide to an amount of $25,430.00 for a contribution to the cost of construction of Gordons Road to the Responsible Authority. This amount of contribution is based on the area of the land being subdivided on a per hectare basis. All costs associated with the preparation and execution of the Agreement must be borne by the permit/holder/owner.

41 It is worth quoting from some relevant paragraphs from Mr Montebello's written submission, where Mr Montebello provides some useful background as to the circumstances that led to Condition 24.

The condition requires some background explanation. A Development Plan Overlay (schedule 6) applies to this land and indeed the broader area of South Morang. This part (that is around Gordons Road) of the broader South Morang area comprises an old rural residential subdivision whereby some largish lots were created and developed with housing some time ago. However, as the expansion or urbanisation of South Morang has continued to extend northwards, the land has become more valuable for its subdivision potential for conventional residential development.

The South Morang Local Structure Plan identifies the expected pattern of development in the broad area. However, due to the nature of this particular area with its prior rural residential or low density residential type history, lots were broken up into smaller parcels raising specific issues about development patterns. To that end, in order to try and facilitate the development of the land for conventional residential, Council approved the Gordons Road Outline Development Plan and as the development plan under DPO(6) for this particular area. The Tribunal is familiar with the Gordons Road Development Plan.

As sometimes occurs, the plan was developed by the largest landowner in the area namely South Morang Pastoral Company (through consultants SJB Planning). The area to which the plan applies can be seen in the document itself.

It is clear from the document that the most important item of infrastructure (apart from drains, sewer etc) is the road that provides access to the various parcels of land. That road is known as Gordons Road (or sometimes Gordons Lane).

South Morang Pastoral was the first developer to proceed in this area and sought to proceed with the development of its land for what has become known as Waterstone Hill Estate. This estate is a large estate which has its only access off Gordons Road. Clearly, in order to proceed with the estate, the development had to construct Gordons Road which was at the time an unconstructed unsealed road.

Given that South Morang Pastoral wished to proceed with the development of its land it entered into an agreement with Council such that it would construct Gordons Road, and in return Council agreed that it would try and recoup contributions from the other smaller landowners when they sought to subdivide their land in specified proportions. The proportions were specified by reference to the anticipated yield of each of the various parcels of land within the area of the Gordons Road development plan.

A section 173 agreement was drafted and executed by most although not yet all of the landowners in the area of the plan.

The section 173 agreement(s) reference the proportional contributions by each landowner. The contribution of number 384 was and is $25,430 consistent with the amount sought by the condition. It is to be observed that the amount was calculated by reference to the developable area and %age of total developable area as described in the approved development plan.

Since the house at the rear was removed, the developable area of the land at 384 has in fact increased which means that the contribution proposed is less than what it otherwise would have been. In any event, that is to this owner's benefit. The impact would be marginal after the associated consequential calculations are carried out.

The contribution sought from no. 384 is one of the smaller contributions of all the landowners but a fair contribution.

Gordons Road provides important access to the proposed subdivision albeit now, since the development of the southern route (for which the applicant also has not contributed) not the only route.

Roads like Gordons Road, being collector roads are not included in the South Morang Local Structure Plan infrastructure funding component. That DCP includes roads which are of a sub-arterial classification and above and not the more local roads such as Gordons Road. Therefore, roads like Gordons Road need to be funded by developers as they proceed. In the absence of some fair approach to funding of those roads where there are multiple landowners (like this area), the first developer will need to construct the road and the last developer will usually seek to ride on the first developer's coat tails so to speak which is what this developer is seeking to do in challenging the condition.

The Tribunal will note that Gordons Road has been constructed and paid for by South Morang Pastoral. The principal obligation upon Council in the section 173 agreement is that Council must pay the amount paid by (other) owners within 30 days to the developer (South Morang Pastoral).

Council's Justification of Validity of Condition 24

42 The thrust of Mr Montebello's position in seeking to defend Condition 24 was that Condition 24 can be justified having regard to Section 62(5)(c) of the Act, or alternatively by reliance on Section 62(2) and the principles arising from the King Ranch case.

43 However, in the course of discussions during the hearing, it was significant that Mr Montebello conceded that there is a major problem for his "Section 62(5) argument" in that s.62(5)(c)(iii) expressly refers to a situation where "... the remaining cost is to be met by any Minister, public authority or municipal council providing the works, services or facilities".

44 In the situation here, the reality is that the aim of Condition 24 is to recoup part of the cost of road works which have earlier been carried out by South Morang Pastoral (ie. South Morang Pastoral was the "pioneer developer" in this area who had to carry out the relevant road works on Gordons Road). The significance of this is that South Morang Pastoral is a private developer, not a "Minister, public authority or municipal council" as required by s.62(5)(c)(iii).

45 Given the discrepancy identified immediately above, he sensibly concentrated his attention on his alternative submission that I could still apply the King Ranch principles and Section 62(2) to reach a finding that Condition 24 is valid, also relying on the precedent of Christian Brothers Vic Pty Ltd v Banyule CC VCAT 2001/18563.

46 Although Mr Naughton raised some other fairly technical challenges to the applicability of Section 62(5), for my purposes here his key thrusts in attacking the validity of Condition 24 were that:

•

Council cannot rely on Section 62(5) due to the initial roadworks having been done by a private developer, rather than by "...any Minister, public authority or municipal council..." as required by Section 62(5)(c)(iii); and

•

this is the very type of condition which the revised Section 62(6) is aiming to prohibit, since the proposed Condition 24 requires a $25,430 contribution to "works" but this does not arise from any approved DCP, nor does it fit within any of the other exceptions mentioned in Section 62(6).

47 I shall return to the second of these two points (as it is more complicated) I my reasons below.

48 In relation to the first point, my finding is that I accept that in the circumstances here Council cannot rely on Section 62(5)(c), since the initial roadworks were done by a private developer rather than Council. It follows that Mr Montebello's submissions regarding Condition 24 "rise or fall" on the strength of his alternative position that Condition 24 can be justified having regard to s.62(2) of the Act and the King Ranch/Christian Brothers decisions.

Analysis of King Ranch and Christian Brothers Decisions

49 The case of Cardwell Shire Council v King Ranch (Australia) Pty Ltd [1984] HCA 39; (1984) 53 ALR 632 involved a residential development in Queensland and the imposition of a permit condition requiring the developer to make a financial contribution towards the upgrading of an off-site road and a bridge that were necessary to provide access to the residential development. The important point here was that the works in question involved not the development site but other nearby land which it was submitted would still be sufficiently affected by the development for the purposes of the condition. The High Court accepted this line of thinking and upheld the condition.

50 In the course of the hearing before me, both parties agreed that the Victorian case of Christian Brothers Vic Pty Ltd v Banyule CC VCAT 2001/18563 was also highly relevant and central to my analysis of the validity of Condition 24 here.

51 Christian Brothers involved the subdivision of part of a Christian Brothers campus into 67 residential allotments. The contentious permit condition proposed by Council (as amended at the Tribunal hearing) involved the requirement that the Christian Brothers pay the full cost (being $48,000) of a roundabout on one of the off-site access roads into the subject land. In the final result, Senior Member Byard held that this form of condition was valid, but assessed $24,000 as being a more appropriate contribution in the circumstances.

52 At the risk of generalising, in brief the Tribunal found in Christian Brothers that:

•

it could not rely on Section 62(5) of the Act (as it then was), since 62(5) as at 2001 did not deal with/validate the imposing of permit conditions requiring a contribution to off-site works;

•

it could prima facie validly impose a permit requiring the $24,000 contribution to the off-site traffic roundabout under Section 62(2) of the Act (Section 62(2) being the section empowering Council to impose "...any other condition that it thinks fit"), subject to an important proviso dealt with further below. In considering the scope of the discretion afforded by Section 62(2), Senior Member Byard was satisfied that 62(2) had a sufficiently broad scope to encompass a condition requiring a contribution to off-site works, provided the condition otherwise satisfied the normal common law tests of validity (notably the four criteria under the Eddie Barron case);

•

The Tribunal recognised a potentially fatal problem for the contentious condition, in terms of the effect of Section 62(6) of the Act (as it then was). In summary, Section 62(6) at the time of the Christian Brothers decision prohibited a responsible authority from imposing a condition requiring a financial contribution towards "services or facilities", except where the condition involved an approved DCP or a Section 173 Agreement;

•

Senior Member Byard found, on the particular facts in front of him, that the contentious financial contribution required of the Christian Brothers (ie towards the roundabout) involved a contribution to "works" (there was no reference to "works" in 62(6) at that time), as compared to a contribution to "services or facilities" (which were expressly recognised in 62(6). Relying on this distinction, Senior Member Byard ultimately found that 62(6) as it then was had no application to the proposed contribution to the roundabout "works", and hence the contentious condition was upheld (albeit with a reduced quantum of contribution).

53 Following the recent gazetting of the Planning and Environment (Development Contributions) Act on 16 December 2004, Section 62(6) now provides as follows.

(6) The responsible authority must not include in a permit a condition requiring a person to pay an amount to for or provide works, services or facilities except-

(a) in accordance with sub-section (5) or section 46N; or

(b) a condition that a planning scheme requires to be included as referred to in sub-section 1(a); or

(c) a condition that a referral authority requires to be included as referred to in sub-section (1)(a).

54 The critical changes are the removal of the reference to "Section 173 Agreements" in the previous version of 62(6), and the new version of 62(6) expressly encompassing not only services and facilities but also "works".

55 By effectively "plugging the gap" that was identified in the Christian Brothers decision by adding the word "works", it follows that the approach which Member Byard took to the previous version of 62(6) has now fallen away. Accordingly, to the extent that Mr Montebello was urging me to take the same approach here that Senior Member Byard took in Christian Brothers, my finding is that Mr Montebello's urgings lack foundation and the new version of 62(6) stops me applying the same line of thinking as was used by Senior Member Byard.

56 Although Section 62(6) does not prohibit a condition which can validly be imposed under Section 62(5), I have already indicated that I do not accept that there is any basis for the Council relying on Section 62(5) here, since Condition 24 seeks to recoup monies spent on Gordons Road by the "pioneer developer", rather than these Gordons Road works having been done by "...any Minister, public authority or municipal council...".

Second Reading Speech and Development Contributions Review Process

57 Before reaching an overall finding on the validity of Condition 24, it is worth considering whether any guidance comes from reviewing the Second Reading Speech (or other Parliamentary debate) for the Planning and Environment (Development Contributions) Bill, or from the Review Process that led to that Bill.

58 In relation to the former, I have reviewed both the Parliamentary Second Reading Speech and the associated debate. While there were no "gems" directly on point, I note that the Second Reading Speech by the then Planning Minister did include the statement that "...permit conditioning (sic) provisions should not undermine the principle that development contributions applying to landowners should be collected via development contribution plans". It is pertinent in reviewing this quote that Condition 24 effectively relates to a defacto scheme (rather than an approved DCP) to recoup the Gordons Road development costs from multiple landowners.

59 Turning to the Development Contributions Review process, this involved a very long consultation and reporting process running from 2000 to 2003, with the aim of improving the operation of the development contribution provisions under the Act. In particular, it was widely acknowledged that there had been a very low take-up by Councils of the opportunity to prepare DCPs since the mid 1990s, with the practical result that in most cases what might be described as "haggling" over development contributions still occurred though the use of Section 173 Agreements.

60 The Review process involved a Steering Committee with broad representation, extensive consultation, and the production of both an initial report and a final report ("A new development contributions system for Victoria") in May 2003. A good place to review same is the DSE website (www.dse.vic.gov.au, click on "planning", then click on "development contribution guidelines", then click on "review of development contributions").

61 While the outcome of this Review is worthy of a separate paper in itself, suffice to say that the Review process inter alia:

•

recognised the need for a much greater use of DCPs by Councils;

•

recommended the introduction of a simpler system of using a pre-set schedule (ie "off the shelf") of infrastructure levies, to reduce the work involved in preparing a DCP; and

•

recognised the need for legislative amendment to Section 65 of the Act, to improve and tighten the statutory framework for the imposition of development contribution permit conditions by Council.

62 By way of example of the Review process pushing for greater utilisation of DCPs rather than arbitrary use of permit conditions, the "Detailed guidance about the use of DCPs" chapter in the May 2003 paper has the following opening paragraph.

Development contribution plans (DCPs) will continue to be the key mechanism use to levy new development for contributions to planned infrastructure to meet the needs of future communities.

63 In the "A clearer framework for the use of planning permit conditions" chapter of the May 2003 paper, it is significant that where the final paragraph discusses the on-going use of permit conditions (ie rather than DCPs) by Councils, the focus is on the provision of on-site infrastructure relating just to the individual development (eg on-site roads, on-site drainage, etc).

Findings of Tribunal regarding Validity of Condition 24

64 Having regard to my discussion above of the King Ranch and Christian Brothers cases, Sections 62(5) and 62(6), the Second Reading Speech for the Amendment Bill and the Development Contributions Review process, my overall finding is that Council did not have the power to validly impose Condition 24, and that Condition 24 should be deleted from the Permit.

65 The key to this finding is the important changes to the text of Sections 62(5) and (6) under the recent Amendment Act. In particular, the operation of Section 62(6) has been tightened so as to close off the potential to use the Christian Brothers approach of distinguishing between services/facilities versus works.

66 Rather, the situation now is that Condition 24 falls fairly and squarely within the operation of Section 62(6). Section 62(6) effectively strikes down Condition 24, since there is no ability here to defend Condition 24 by relying on the exceptions under 62(6) (ie the proposed Condition 24 does not arise from Section 62(5), a DCP, a requirement of a Planning Scheme or a requirement of a referral authority).

67 This outcome is not that surprising when one has regard to the relevant provisions of the Amendment Act Second Reading Speech and the Development Contributions Review process that I have highlighted above. I this Speech and Review process, there is a clear signposting that, as a matter of good policy and planning practice, Councils now need to use planning permit conditions much more sparingly and make the preparation of DCPS their main focus of how they deal with development contribution issues.

68 While the process may have needed a long time to get up momentum, clearly the "goal posts have changed" in how development contributions are to be imposed, and it is in everyone's interests for the various stakeholders to get up to speed on the changes and adjust to the new regime.

69 For the reasons set out above, I conclude that:

•

Condition 25 is valid and can remain a proposed condition; but

•

Condition 24 is invalid and should be deleted from the proposed conditions.

70 All stakeholders in the development contributions system need to recognise the significance of the recent amendments to Sections 62(5) and (6) of the Act. In particular, there is a clear intent (based on the work done in the 200-2003 Review process) that Councils need to take a more formal/prescriptive approach to dealing with situations where Council is seeking development contributions from multiple landowners.

71 While it may have been possible in the past to deal with this type of "contributions from multiple landowners" situation in a more informal manner through permit conditions (such as Condition 24 in question here), Council's will now need to take a more proactive and "up front" approach through the preparation of DCPs. The introduction of the "deemed to comply" or "off the shelf" system of infrastructure levies should hopefully ease the logistical problems that have apparently constrained the preparation of DCPs since 1995.

72 I note that Member Hewett will now shortly issue a final overall order, pulling together his Interim Orders and reasons and my legal findings.